You're correct Slave1pilot, he's got the colors on the top cap reversed.
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As for your two questions, do a quick search in the "Rocketpack, blasters and shin tools" section for some of the scratchbuild jet pack threads. You'll find some great ideas there for attaching your rocket.
As for the thruster attachment... you'd be best off to drill some pilot holes ( for placement ), then increase the hole size to accomodate the thruster. For this, I used a spade bit... but I'm sure that there are other/better methods for doing this.